This chapter attempts to find the ideal reserve requirement–financing to deposit ratio (RR-FDR) ratio for Islamic banking industry in Indonesia by deriving the ideal quantitative formula of the ideal RR-FDR and conducting simulations to identify its impact to each Islamic bank. Simulations on the financial ratios related to calculating RR-FDR are conducted based on the bank profit maximization model and the bank balance sheet approach. The results find that FDR is suggested to be between 77 and 109 % with 5 % RR. However, the liquidity reserve position of each Islamic bank shows that there are five Islamic banks having a minimum liquidity reserve (less than 5 % RR) and seven Islamic banks having a minimum liquidity reserve (less than 8 % RR). It means Islamic banking industry in Indonesia does not have enough liquidity reserves to mitigate both short-term and long-term liquidity mismatches leading to liquidity pressures. Hence, the regulator is suggested to consider such an optimal FDR-RR in Islamic banking industry for an effective implementation of the macroprudential policies.